Govt may divest 15% in NMDC; CCEA nod by Nov-end: Sources

CNBC-TV18 learns that the government is likely to divest 15% stake in NMDC. The divestment proposal is likely to go to Cabinet on November 19, reports CNBC-TV18's Siddharth Zarabi quoting sources.

The draft proposal for the Cabinet Committee on Economic Affairs or CCEA, for its consideration, has been put up and it is likely that on and around November 19 or thereabouts it may be considered by the Cabinet.

What our sources are telling us and what our colleague Aakanksha Sethi spoke to officials who told her that if this divestment has to be done within the current financial year, so a quick CCEA approval is mandatory and that should approve by the end of this month, if not later, so that the process of actually going ahead with this divestiture is started.

Broadly at this stage, there is a 15% divestiture. We do not have the details of the additional fresh equity that the company may choose to issue. But remember in all cases in the recent past, the government has piggybacked on the offer by the company to raise money for itself. The current last known shareholding of the government and other promoters in NMDC was around 98.38%. So, a significant 15-20% divestiture will mean additional liquidity for the stock.